The leaders of PNM Resources Inc., the parent of Public Service Company of New Mexico and Texas-New Mexico Power Co., and Avangrid Inc. have pushed the deadline for their proposed merger to April 20, 2023 from Jan. 20 of this year to allow them to appeal a recent ruling from New Mexico regulators that has stalled the deal.
Avangrid, which is majority-owned by Spanish energy giant Iberdrola SA, and PNM announced plans to combine in October 2020 via a cash deal valued at $8.3 billion. Various federal regulators and the Public Utility Commission of Texas last year gave their nod to the proposal, which stands to create a utility that serves more than 4 million electric and gas customers in six states. But the New Mexico Public Regulation Commission last month rejected a stipulated agreement – supported by numerous other stakeholders, including the Land of Enchantment’s Attorney General – that would provide more than $300 million in benefits and put in place a number of local-control safeguards.
In turning down the Avangrid-PNM plan that had been filed last May, commissioners said they were concerned about the service track record of Avangrid’s utility in Maine as well as an investigation into alleged spying of three Iberdrola executives.
"Our appeal to the New Mexico Supreme Court preserves the benefits to customers and communities negotiated in our stipulated agreement with parties, which are unprecedented for this type of transaction," Pat Vincent-Collawn, PNM’s chairman, president and CEO, said in a Jan. 3 statement. "We will continue to prioritize our customers, communities and employees and move forward, irrespective of the pending merger, to execute our business plans and invest in infrastructure and systems to meet customers' needs, support our communities and advance the transition to clean energy in New Mexico."
In a fall filing with the U.S. Securities and Exchange Commission, Avangrid executives said they expected the New Mexico PRC’s approval to be granted before the end of 2021 and to close the acquisition of PNM shortly thereafter. The companies’ appeal notice of the regulators’ decision to the New Mexico Supreme Court gives them 30 days to file statements outlining their arguments. The court is not under a specific time frame to hear the appeal.
Shares of Avangrid (Ticker: AGR), which also runs a portfolio of renewable-energy generation facilities across the country, were up 0.5% to $49.87 Jan. 4. They are down slightly over the past six months. PNM shares (Ticker: PNM) were up slightly to $45.51 on the afternoon of Jan. 4; the Avangrid agreement calls for investors to receive $50.30 per share. They fell about 10% around news of the New Mexico ruling and have since traded in a narrow range.
